It Takes Millions of Entrepreneurs

A survey shows earth has 388 million entrepreneurs.

Image: iStockphoto

About 388 million people around the world started businesses or were running new ventures in 2011, according to the Global Entrepreneurship Monitor.

Of these new business owners, 165 million are between the ages of 18 and 35, and 163 million are women. Those are interesting demographic statistics, but other numbers may be more important to the economies of the 54 countries that were part of the GEM survey: More than 140 million of these early-stage entrepreneurs expect to create at least five new jobs over the next five years; and 69 million are offering innovative products or services that are new to the marketplace.

“These figures and growth projections affirm that entrepreneurial activity is flourishing across the globe and that entrepreneurship, as an economic engine, is the best hope for reviving a weakened world economy,” said Donna Kelley, associate professor of entrepreneurship at Babson College.

Kelley co-authored the GEM report, along with professor Slavica Singer of J.J. Strossmayer University in Croatia, and professor Mike Herrington, director of the Centre for Innovation and Entrepreneurship at the University of Cape Town, South Africa.

More than 12 percent of working-age Americans were engaged in entrepreneurial activity last year, the report found. That’s the highest rate among mature economies, but it pales compared with China’s 24 percent rate of entrepreneurial activity.

The types of businesses being started differ, however, depending on a country’s stage of economic development. In emerging and developing economies, consumer-oriented businesses and manufacturing dominate entrepreneurship. Entrepreneurs in mature economies like the U.S. tend to be involved in more knowledge-intensive business services and have higher growth projections.

Countries can promote entrepreneurship through policies that “improve the flexibility of labor, communications, and market openness while eliminating bureaucracy and red tape,” Herrington said. “Cultures that reward hard work and creativity, rather than political connections, will also encourage entrepreneurship.”

“Societies must consider that entrepreneurship is not the heroic act of a few individuals, but the accomplishments of many people who pursue their ambitions in a supportive cultural and institutional environment,” Singer said.